As indicated in the memorandum which has been circulated with the Bill, the object of the Bill is to amend the Health Contributions Acts so as to provide for an increase in the current rates of health contributions. The increases proposed in the Bill are 6p a week and £3 a year, with effect from 1st April next. This is an increase of roughly 20 per cent on the present rates of 33p a week and £15 a year.
It is estimated that the revised rates of health contributions proposed in the Bill will bring in an additional £2.2 million in a full year and in the current year will raise receipts from that source to a total of £12.46 million. The Estimates for the Health Vote for 1977 have been prepared on the basis that this estimated amount will be received from health contributions as an appropriation in aid of the Vote.
The explanatory memorandum indicates the population groups who are required to pay health contributions and the services to which they are entitled. Senators will note the revised income limit of £3,000 for "limited eligibility" services which was introduced last year in order to preserve or restore entitlement to health services where the effects of inflation were upsetting the situation. The revision in effect maintained the limit at its traditional level in real terms. It is not designed to make any change in the proportion of the population which has been traditionally eligible for these services.
As I indicated in the course of the Dáil debate on this Bill, I have set up a working party to examine certain anomalies which arise in the definitions used for "limited eligibility" categories and in the identification of eligible persons and to consider what action might be possible to remove these anomalies during the period when the income limit will continue to exist. The working party is representative of the medical organisations, the Federated Union of Employers, the Congress of Trade Unions, the health boards and my Department. The first meeting of the working party has recently been held.
The limited eligibility services, including as they do hospital services, account for the greater part of the total cost of the health services. The estimated cost of the limited eligibility services in 1977 is about £220 million, which represents an increase of roughly 20 per cent on the corresponding figure for 1976, £184 million. The proposed increase in the health contribution rate is roughly proportionate to this rise in cost since the rate of contribution was revised last year. The estimated total receipts from health contributions this year is £12.46 million. This represents a significant contribution towards the cost of the health services which would otherwise have to be sought from the Exchequer.
Senators will be aware that the financial provisions made in this year's Health Estimate is designed to ensure the maintenance of 1976 health services levels during 1977 and that in addition a further £10 million has been made available to improve and develop the health services in ways consistent with the Government's job creation programme. These additional moneys will be used to open new units already completed or due for completion in 1977 and to provide other specific services which will be identified following consultation with health boards and other health agencies.
The additional moneys which I have referred to relate to non-capital expenditure only. As Senators are aware, I have already issued a statement regarding the health capital programme, for which a total sum of £16.0 million has been allocated. This allocation will enable me to provide finances for ongoing schemes and for new starts on a significant programme of major developments. As indicated in the statement, this capital programme is expected to provide about 700 additional jobs. Over the next few weeks I expect to be able to announce details of the allocations to be made from the non-capital development moneys and the job creation element associated with that development. All these developments will result in a considerable improvement in the level of services which, in the case of persons in the limited eligibility group, they will obtain for a very modest increase in the amount of health contribution they will be required to pay.
I should like to refer to the increased charges for hospital services which will come into operation with effect from the 1st April next. Charges for hospital services are made in the case of persons without statutory entitlement and also in the case of eligible persons who, instead of availing of services in public accommodation to which they are entitled free of direct charge, choose to be accommodated in private or semi-private rooms. These charges have always been substantially less than the actual cost of services. Increases in hospital costs last year widened the gap between charges and costs and the situation at present is that charges payable by persons without statutory entitlement represent less than half of the actual cost of maintaining a hospital bed. Because of this and the further increases in costs which will arise in the current year it was necessary to arrange for an increase in charges.
The increased charges will still be considerably less than the actual cost of services. For example the charge from April onwards for services in semi-private accommodaton in a voluntary teaching hospital will be £15.20 a day in the case of a person without statutory entitlement and £15.10 a day in the case of a person with statutory entitlement. The average actual costs of services in such hospitals will, however, amount to £30 a day.
Most persons who will be affected by the increased charges are insured with the Voluntary Health Insurance Board. The board are arranging to allow members who may be underinsured to increase their cover with effect from 1st April and in advance of ordinary renewal dates. I understand that the board will be advising members shortly of the revised minimum cover which they consider necessary and of the steps to take to secure increased cover.
The extra cost of health insurance based on the increase in the minimum cover which will be recommended by the Voluntary Health Insurance Board will vary according to individual circumstances. In the case of a married couple with four or more children under 18 years of age who have not got statutory entitlement the present premium for maintenance cover for semi-private accommodation, based on the minimum number of units recommended by the Voluntary Health Insurance Board for persons in group schemes is £86 a year. As from April next the corresponding annual premium to be paid will be £108, representing an increase of £22 a year. In the case of a similar family unit with statutory entitlement to services the corresponding costs of health insurance to cover charges in public hospitals will increase from £26 to £36 a year, that is, by £10 a year. The cover recommended by the Voluntary Health Insurance Board for private hospitals is somewhat higher. Income tax relief is afforded in respect of premium payments to the Voluntary Health Insurance Board so that the net cost of health insurance, and of course the cost of the increases in cover, will be substantially less than the figures which I have quoted.
As Senators are aware, the Dáil has agreed that a Select Committee be appointed to examine, inter alia, alternative ways of financing the health services. In the meantime it is necessary to continue to avail of the existing financing sources which at present supplement the moneys provided from the Exchequer to meet the overall financial requirements of the health services. Health contributions represent the most significant of these supplementing sources.
I commend the Bill to the House for a Second Reading.